Daily News - PNC expected to buy RBC unit: source (Reuters) Daily Business News
NEW YORK (Reuters) – PNC Financial Services Group Inc (PNC.N) is expected to buy Royal Bank of Canada's (RY.TO) U.S. retail bank operations, a source briefed on the situation said on Saturday.
Pittsburgh-based PNC Financial and Winston-Salem, North Carolina-based BB&T Corp (BBT.N) were in the race to buy the business, sources have said.
Terms of the possible deal between PNC and RBC were not immediately available. One financial services banker who is not involved in the deal said the business could be worth about $3 billion.
PNC and RBC declined to comment on Friday, when news of the possible deal was first reported by the Bloomberg news service.
RBC, the largest Canadian bank by assets, put its struggling U.S. consumer banking business on the market after failing for years to wring profits from the operations acquired nearly a decade ago.
It retained JPMorgan Chase & Co (JPM.N) to advise it on the sale process, a source said in April. JPMorgan declined to comment.
RBC's U.S. retail bank has lost money for 10 straight quarters and has generally been a drag on earnings since RBC purchased North Carolina-based Centura Bank in 2001 for $2.2 billion ($3.5 billion Canadian at the time).
The unit was hit hard by the U.S. real estate collapse and faced waves of foreclosures.
Royal Bank Chief Executive Gord Nixon said in January the bank was unsure whether it would eventually add to its U.S. retail banking business, or retreat from it.
A sale would follow two major U.S. acquisitions by Royal Bank's Canadian competitors in recent months.
Bank of Montreal (BMO.TO) agreed to buy U.S. lender Marshall & Ilsley Corp for $4.1 billion, offering a 34 percent premium, and Toronto-Dominion Bank (TD.TO) agreed to buy Chrysler Financial for $6.3 billion, making it one of North America's biggest bank-owned auto lenders.
(Reporting by Paritosh Bansal; additional reporting by Pav Jordan and Euan Rocha in Toronto)
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